subject: What Is It About Holidays And The Forex Trading Market? [print this page] What Is It About Holidays And The Forex Trading Market?
Foreign exchange currency traders may be wondering if it is a good idea to engage in FOREX trading during holidays. As the FOREX market is worldwide and opens 24 hours a day, a trader has the opportunity to trade on holidays such as Christmas or New Years Day. There are both advantages and disadvantages to trading during the holiday period.While the FOREX market is open every day of the year, most banks are not. People who are involved in FOREX should keep in mind that while they may be able to trade on the holiday, they might not have access to a bank that is rendering full services to customers. Traders should also be aware that their broker may not be available on holidays.Generally most FOREX brokers will have facilities that are available for trading on major holidays. However volume tends to be thin during certain times of the year. The reality is that even traders like to take some time off over the holiday period. Decreased volume in FOREX means decreased liquidity. When the market does not have liquidity it is difficult for a trader to get in and out of a position while making a profit. When there are many traders participating, traders can have fun and make money at the same time.Those participating in FOREX need to be aware that some holidays will have a bigger impact on the market than others. For example, more people celebrate Christmas all over the world than Thanksgiving. This means the market will be much quieter on Christmas day than it will be on Thanksgiving.One consequence of the market not being as liquid as it should be is the increase in the spread that is charged by the broker. Regular traders will notice a similar effect on the weekend. Generally traders prefer a smaller spread so that they can keep more of the profits they have made.Those that are wondering if they should trade on weekends or holidays should do so if they want to trade in a market that some would consider to be boring. As trades are more expensive during these times of the year, traders may be better off spending the day with their families. They can then get back to trading once the holiday period is over. Forex trading during holidays can be expensive and tedious due to the lack of liquidity in the market.
